Iraq Economic Growth (Nominal GDP, ann. var. %)

The economy should have been one of the region’s star performers last year, with growth benefitting from looser average OPEC+ quotas. In 2022, crude production increased around 10% year on year. However, failure to pass a 2022 budget will have hampered public spending, and investment was likely contained by institutional gridlock and sociopolitical instability. Turning to 2023, momentum is easing; in January, oil production fell from December and was up less than 5% in annual terms on the back of tighter OPEC+ quotas since late last year. Moreover, the parallel exchange rate weakened substantially in January, hurting purchasing power; the Central Bank responded by re-pegging the currency at a stronger rate against the dollar. In politics, the country is yet to pass a 2023 budget, which will be containing government expenditure.